Swedish post office to axe 2,000 staff

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The state-owned postal service proposes 200 million dollar in dividend to its owners – as it plans to cut 2,000 jobs.

Posten Norden, which runs postal services in Sweden and Denmark, plans massive lay-offs in a move to cut costs as profits tumble – blamed on dwindling letter volumes and increased competition from digital communications.

The company -- formed last year through the historic merger of Danish Post Danmark AS and Swedish Posten AB -- posted a fourth-quarter net loss of 696 million kronor ($96 million). The same period a year earlier it made a 794 million kronor profit.

In a move to save money Posten Norden now initiates further cost-cutting programs.

"It will mean fewer employees. And it is too early to say anything about that. But we cut almost 4,000 during 2009, across the two countries. It will not be as many during 2010, but perhaps we can say 2,000," the company’s chief executive officer Lars G Nordström told the TT news agency.

A number of jobs would be cut through retirements, but about 1.1 billion kronor has also been set aside for lay-off compensation packages.

Still, the board proposed a dividend (to the Swedish and Danish states) of 1.44 billion kronor.

Lars G Nordström told the news agency that the dividend is "acceptable" as the full year result was boosted by capital gains of 2 billion kronor from the sale of a stake in the Belgian post office.

The company, which today has around 47,000 employees, is 60-percent-owned by the Swedish state, while Copenhagen owns the remaining 40 percent.

The firm reported a turnover of 11.6 billion kronor, down from 12.1 billion kronor the year before.

Posten’s customers shouldn’t be affected by the lay-offs, Lars G Nordström said.